PAWAN S. BALI speaks to NAINA LAL KIDWAI after the release of her book Survive Or Sink: An action agenda for sanitation, water, pollution and green finance. Excerpts from an interview:
How did a banker start writing on sanitation and environment?
(Laughs) My interest in water and sanitation started really in water, as at HSBC. We had very big programmes involving 100 millions pounds. These programmes were at a global level and targetted climate change and water. I got engaged with it, learned a lot and was able to apply it to India. I ensured a lot of that money from HSBC was spent in India. That took me down the stream of water. Then sanitation. At a water event at Stockholm, about 40 per cent of the conversation was on sanitation and India was always mentioned as being in an absolute mess. I used to hang my head in shame, sitting somewhere back with people talking about my country and talking how sanitation problem of the world would not be solved till India solves it and how India’s solutions were very poorly implemented. That led me to believe there is work to be done on the sanitation front. So a group of us started to work on it. I asked two-three organisations, one of them was Water Aid with which I was working very closely. They were into sanitation on what was needed. Just brainstorming on what was to be done. That was when I and my husband thought that we should start Indian Sanitation Coalition (ISC). There was a belief that we needed collaboration, we need people who have never worked together to work together. I was hearing cases from these agencies on how there will be four NGOs in the same district and one does not know what the other was doing. Everyone was working in their silos and nobody was doing it enough to help the country. Four months after we had decided this, the new government and our Prime Minister Narendra Modi announced it from the ramparts of the Red Fort and we realised that the timing was brilliant. Now the government alignment was completely in the direction we wanted to work. The thing that the government was behind it made the corporates to think about it better.
The book comes at a time when the President of world’s largest economy Donald Trump believes climate change is a hoax?
Well, the good news is that not everybody believes Donald Trump. There are enough Americans, American think-tanks and American money that still believes climate change is important even if their President does not. That initiative has not changed. The absolute good news is that countries like China are firmly on the programme. India can learn a lot on what China is doing on sanitation, on pollution and green finance agenda. So America is on the programme but our learning is to happen from all over the world. And not just the Western world.
But has it been a setback?
I will not call it a setback but disappointment. The biggest country in the world economically and the biggest polluter in the world which it is in terms of its carbon footprint is not on the board. But good news is that many constituents in the US are on the programme. I won’t call it a setback because the rest of the world has moved on. Partly, it was because of it that France and India came together to form the International Solar Alliance. India, for the first time, has a global institution housed in India. For every time a gap is created and a big country like the US moves out, some other country moves in, hence you see the leadership of China rises in some spaces. And I trust, we will also see leadership of India rise in critical areas like solar and renewable and the whole discussion around sanitation.
India has set a target of 175 GW of installed renewable energy capacity by 2022. Do you see it as achievable?
We are doing well on it And the country is really pushing ahead. What is happening in solar energy area is interesting. Earlier, we had small non-descriptive companies. Some of those have grown big which is wonderful. The good news is also that a lot of big guys have entered this space. Like Softbank has committed almost $ 20 billion in solar energy and they are doing it in partnership with Bharti Enterprises. Adani is into solar too as is Reliance. Some of the big MNCs, Total and BP, are looking at solar as well. So, we have got a large corporate for which funding is not an issue because they raise money on global balance sheet.
To achieve that target to generate 175GW electricity from non-fossil fuel by 2022, it is estimated that we will need an investment of $200 billion. It is a big challenge...
Yes, it is. But the fact is that we are beginning to move the needle on it. There are two ways. One is offshore financing. There is a very large green bond developing in the world. That is the money which is being raised to be invested in green energy. The money that is abroad can be invested in our renewable projects. This money can be invested in our energy efficient projects. So if we can ensure we have enough bankable projects, which are certified green, we have the ability to pull that money. Equally, we need to raise money here which is then contributed into these green projects.
So the good news is that this market is growing. Now we have green bonds being issued in India. We have more and more green projects in India but we need to see a lot more. We need to improve our rating process by which I mean that audit which happens. I know if I have invested in solar, it is green. But a building which is green should also be able to benefit from that. To be a green building, the rules are there. TERI also has a process of rating. We need to ensure that the bank understands all this so that they fund a building which is green. A project can be termed green also if it is energy efficient like a cement plant. So part of such projects should be eligible for green financing.
You have written about having a BRICS rating agency…
It was an interesting idea which was proposed during Russian chairmanship.
The idea was that we need rating processes which are much more geared to emerging markets and not just deriving from rating process elsewhere in the world.
What happens is that we can have projects which are absolute gold standard but because the country — we are a developing nation — risk is seen as barely investment grade the cost of our projects, no matter how good they are, gets ranked below the country. So (it is ) to look at the rating process which helps our projects and our countries. The idea is moving ahead quiet well.
